[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[S. 1574 Introduced in Senate (IS)]







104th CONGRESS
  2d Session
                                S. 1574

    To provide Federal contracting opportunities for small business 
concerns located in historically underutilized business zones, and for 
                            other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

            February 27 (legislative day, February 23), 1996

   Mr. Bond introduced the following bill; which was read twice and 
              referred to the Committee on Small Business

_______________________________________________________________________

                                 A BILL


 
    To provide Federal contracting opportunities for small business 
concerns located in historically underutilized business zones, and for 
                            other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``HUBZone Act of 1996''.

SEC. 2. HISTORICALLY UNDERUTILIZED BUSINESS ZONES.

    (a) Definitions.--Section 3 of the Small Business Act (15 U.S.C. 
632) is amended by adding at the end the following new subsection:
    ``(o) Definitions Relating to Historically Underutilized Business 
Zones.--For purposes of this section, the following definitions shall 
apply:
            ``(1) Historically underutilized business zone.--The term 
        `historically underutilized business zone' means any area 
        located within one or more qualified census tracts or qualified 
        nonmetropolitan counties.
            ``(2) Small business concern located in a historically 
        underutilized business zone.--The term `small business concern 
        located in a historically underutilized business zone' means a 
        small business concern--
                    ``(A) that is owned and controlled by one or more 
                persons, each of whom is a United States citizen;
                    ``(B) the principal office of which is located in a 
                historically underutilized business zone; and
                    ``(C) not less than 35 percent of the employees of 
                which reside in a historically underutilized business 
                zone.
            ``(3) Qualified areas.--
                    ``(A) Qualified census tract.--The term `qualified 
                census tract' has the same meaning as in section 
                42(d)(5)(C)(i)(I) of the Internal Revenue Code of 1986.
                    ``(B) Qualified nonmetropolitan county.--The term 
                `qualified nonmetropolitan county' means, based on the 
                most recent data available from the Bureau of the 
                Census of the Department of Commerce, any county--
                            ``(i) that is not located in a metropolitan 
                        statistical area (as that term is defined in 
                        section 143(k)(2)(B) of the Internal Revenue 
                        Code of 1986); and
                            ``(ii) in which the median household income 
                        is less than 80 percent of the nonmetropolitan 
                        State median household income.
            ``(4) Qualified small business concern located in a 
        historically underutilized business zone.--
                    ``(A) In general.--A small business concern located 
                in a historically underutilized business zone is 
                `qualified', if--
                            ``(i) the small business concern has 
                        certified in writing to the Administrator 
                        that--
                                    ``(I) it is a small business 
                                concern located in a historically 
                                underutilized business zone;
                                    ``(II) it will comply with the 
                                subcontracting limitations specified in 
                                Federal Acquisition Regulation 52.219-
                                14;
                                    ``(III) in the case of a contract 
                                for services (except construction), not 
                                less than 50 percent of the cost of 
                                contract performance incurred for 
                                personnel will be expended for 
                                employees of that small business 
                                concern or for employees of other small 
                                business concerns located in 
                                historically underutilized business 
                                zones; and
                                    ``(IV) in the case of a contract 
                                for procurement of supplies (other than 
                                procurement from a regular dealer in 
                                such supplies), the small business 
                                concern (or a subcontractor of the 
                                small business concern that is also a 
                                small business concern located in a 
                                historically underutilized business 
                                zone) will perform work for not less 
                                than 50 percent of the cost of 
                                manufacturing the supplies (not 
                                including the cost of materials) in a 
                                historically underutilized business 
                                zone; and
                            ``(ii) no certification made by the small 
                        business concern under clause (i) has been, in 
                        accordance with the procedures established 
                        under section 30(c)(2)--
                                    ``(I) successfully challenged by an 
                                interested party; or
                                    ``(II) otherwise determined by the 
                                Administrator to be materially false.
                    ``(B) Change in percentages.--The Administrator may 
                utilize a percentage other than the percentage 
                specified in under subclause (III) or (IV) of 
                subparagraph (A)(i), if the Administrator determines 
                that such action is necessary to reflect conventional 
                industry practices among small business concerns that 
                are below the numerical size standard for businesses in 
                that industry category.
                    ``(C) Construction and other contracts.--The 
                Administrator shall promulgate final regulations 
                imposing requirements that are similar to those 
                specified in subclauses (III) and (IV) of subparagraph 
                (A)(i) on contracts for general and specialty 
                construction, and on contracts for any other industry 
                category that would not otherwise be subject to those 
                requirements. The percentage applicable to any such 
                requirement shall be determined in accordance with 
                subparagraph (B).
                    ``(D) List of qualified small business concerns.--
                The Administrator shall establish and maintain a list 
                of qualified small business concerns located in 
                historically underutilized business zones, which list 
                shall--
                            ``(i) include the name, address, and type 
                        of business with respect to each such small 
                        business concern;
                            ``(ii) be updated by the Administrator not 
                        less than annually; and
                            ``(iii) be provided upon request to any 
                        Federal agency or other entity.''.
    (b) Federal Contracting Preferences.--The Small Business Act (15 
U.S.C. 631 et seq.) is amended--
            (1) by redesignating section 30 as section 31; and
            (2) by inserting after section 29 the following new 
        section:

``SEC. 30. HISTORICALLY UNDERUTILIZED BUSINESS ZONES PROGRAM.

    ``(a) In General.--There is established within the Administration a 
program to be carried out by the Administrator to provide for Federal 
contracting assistance to qualified small business concerns located in 
historically underutilized business zones in accordance with this 
section.
    ``(b) Contracting Preferences.--
            ``(1) Contract set-aside.--
                    ``(A) Requirement.--The head of an executive agency 
                shall afford the opportunity to participate in a 
                competition for award of a contract of the executive 
                agency, exclusively to qualified small business 
                concerns located in historically underutilized business 
                zones, if the Administrator determines that--
                            ``(i) it is reasonable to expect that not 
                        less than 2 qualified small business concerns 
                        located in historically underutilized business 
                        zones will submit offers for the contract; and
                            ``(ii) the award can be made on the 
                        restricted basis at a fair market price.
                    ``(B) Covered contracts.--Subparagraph (A) applies 
                to a contract that is estimated to exceed the 
                simplified acquisition threshold.
            ``(2) Sole-source contracts.--
                    ``(A) Requirement.--The head of an executive 
                agency, in the exercise of authority provided in any 
                other law to award a contract of the executive agency 
                on a sole-source basis, shall award the contract on 
                that basis to a qualified small business concern 
                located in a historically underutilized business zone, 
                if any, that--
                            ``(i) submits a reasonable and responsive 
                        offer for the contract; and
                            ``(ii) is determined by the Administrator 
                        to be a responsible contractor.
                    ``(B) Covered contracts.--Subparagraph (A) applies 
                to a contract that is estimated to exceed the 
                simplified acquisition threshold and not to exceed 
                $5,000,000.
            ``(3) Price evaluation preference in full and open 
        competitions.--In any case in which a contract is to be awarded 
        by the head of an executive agency on the basis of full and 
        open competition, the price offered by a qualified small 
        business concern located in a historically underutilized 
        business zone shall be deemed as being lower than the price 
        offered by another offeror (other than another qualified small 
        business concern located in a historically underutilized 
        business zone) if the price offered by the qualified small 
        business concern located in a historically underutilized 
        business zone is not more than 10 percent higher than the price 
        offered by the other offeror.
            ``(4) Relationship to other contracting preferences.--
                    ``(A) Subordinate relationship.--A procurement may 
                not be made from a source on the basis of a preference 
                provided in paragraph (1), (2), or (3) if the 
                procurement would otherwise be made from a different 
                source under section 4124 or 4125 of title 18, United 
                States Code, or the Javits-Wagner-O'Day Act.
                    ``(B) Superior relationship.--A procurement may not 
                be made from a source on the basis of a preference 
                provided in section 8(a), if the procurement would 
                otherwise be made from a different source under 
                paragraph (1), (2), or (3) of this subsection.
            ``(5) Definitions.--For purposes of this subsection, the 
        terms `executive agency', `full and open competition', and 
        `simplified acquisition threshold' have the meanings given such 
        terms in section 4 of the Office of Federal Procurement Policy 
        Act.
    ``(c) Enforcement; Penalties.--
            ``(1) In general.--The Administrator shall enforce the 
        requirements of this section.
            ``(2) Verification of eligibility.--In carrying out this 
        subsection, the Administrator shall establish procedures 
        relating to--
                    ``(A) the filing, investigation, and disposition by 
                the Administration of any challenge to the eligibility 
                of a small business concern to receive assistance under 
                this section (including a challenge, filed by an 
                interested party, relating to the veracity of a 
                certification made by a small business concern under 
                section 3(o)(4)(A)); and
                    ``(B) verification by the Administrator of the 
                accuracy of any certification made by a small business 
                concern under section 3(o)(4)(A).
            ``(3) Random inspections.--The procedures established under 
        paragraph (2) may provide for random inspections by the 
        Administrator of any small business concern making a 
certification under section 3(o)(4).
            ``(4) Provision of data.--Upon the request of the 
        Administrator, the Secretary of Labor and the Secretary of 
        Housing and Urban Development shall promptly provide to the 
        Administrator such information as the Administrator determines 
        to be necessary to carry out this subsection.
            ``(5) Penalties.--In addition to the penalties described in 
        section 16(d), any small business concern that is determined by 
        the Administrator to have misrepresented the status of that 
        concern as a `small business concern located in a historically 
        underutilized business zone' for purposes of this section, 
        shall be subject to the provisions of--
                    ``(A) section 1001 of title 18, United States Code; 
                and
                    ``(B) sections 3729 through 3733 of title 31, 
                United States Code.''.

SEC. 3. TECHNICAL AND CONFORMING AMENDMENTS TO THE SMALL BUSINESS ACT.

    (a) Performance of Contracts.--Section 8(d) of the Small Business 
Act (15 U.S.C. 637(d)) is amended--
            (1) in paragraph (1)--
                    (A) in the first sentence, by striking ``,, small 
                business concerns owned and controlled by socially and 
                economically disadvantaged individuals'' and inserting 
                ``, qualified small business concerns located in 
                historically underutilized business zones, small 
                business concerns owned and controlled by socially and 
                economically disadvantaged individuals''; and
                    (B) in the second sentence, by inserting 
                ``qualified small business concerns located in 
                historically underutilized business zones,'' after 
                ``small business concerns,'';
            (2) in paragraph (3)--
                    (A) by inserting ``qualified small business 
                concerns located in historically underutilized business 
                zones,'' after ``small business concerns,'' each place 
                that term appears; and
                    (B) by adding at the end the following new 
                subparagraph:
            ``(F) For purposes of this contract, the term `qualified 
        small business concern located in a historically underutilized 
        business zone' has the same meaning as in section 3(o) of the 
        Small Business Act.'';
            (3) in paragraph (4)--
                    (A) in subparagraph (D), by inserting ``qualified 
                small business concerns located in historically 
                underutilized business zones,'' after ``small business 
                concerns,''; and
                    (B) in subparagraph (E), by striking ``small 
                business concerns and'' and inserting ``small business 
                concerns, qualified small business concerns located in 
                historically underutilized business zones, and'';
            (4) in paragraph (6), by inserting ``qualified small 
        business concerns located in historically underutilized 
        business zones,'' after ``small business concerns,'' each place 
        that term appears; and
            (5) in paragraph (10), by inserting ``qualified small 
        business concerns located in historically underutilized 
        business zones,'' after ``small business concerns,''.
    (b) Awards of Contracts.--Section 15 of the Small Business Act (15 
U.S.C. 644) is amended--
            (1) in subsection (g)(1)--
                    (A) by inserting ``qualified small business 
                concerns located in historically underutilized business 
                zones,'' after ``small business concerns,'' each place 
                that term appears; and
                    (B) by inserting after the second sentence the 
                following: ``The Governmentwide goal for participation 
                by qualified small business concerns located in 
                historically underutilized business zones shall be 
                established at not less than 1 percent of the total 
                value of all prime contract awards for fiscal year 
                1997, not less than 2 percent of the total value of all 
                prime contract awards for fiscal year 1998, not less 
                than 3 percent of the total value of all prime contract 
                awards for fiscal year 1999, and not less than 4 
                percent of the total value of all prime contract awards 
                for fiscal year 2000 and each fiscal year 
                thereafter.'';
            (2) in subsection (g)(2)--
                    (A) in the first sentence, by striking ``,, by 
                small business concerns owned and controlled by 
                socially and economically disadvantaged individuals'' 
                and inserting ``, by qualified small business concerns 
                located in historically underutilized business zones, 
                by small business concerns owned and controlled by 
                socially and economically disadvantaged individuals'';
                    (B) in the second sentence, by inserting 
                ``qualified small business concerns located in 
                historically underutilized business zones,'' after 
                ``small business concerns,''; and
                    (C) in the fourth sentence, by striking ``by small 
                business concerns owned and controlled by socially and 
                economically disadvantaged individuals and 
                participation by small business concerns owned and 
                controlled by women'' and inserting ``by qualified 
                small business concerns located in historically 
                underutilized business zones, by small business 
                concerns owned and controlled by socially and 
                economically disadvantaged individuals, and by small 
                business concerns owned and controlled by women''; and
            (3) in subsection (h), by inserting ``qualified small 
        business concerns located in historically underutilized 
        business zones,'' after ``small business concerns,'' each place 
        that term appears.
    (c) Offenses and Penalties.--Section 16 of the Small Business Act 
(15 U.S.C. 645) is amended--
            (1) in subsection (d)(1)--
                    (A) by inserting ``, a `qualified small business 
                concern located in a historically underutilized 
                business zone','' after ```small business concern',''; 
                and
                    (B) in subparagraph (A), by striking ``section 9 or 
                15'' and inserting ``section 9, 15, or 30''; and
            (2) in subsection (e), by inserting ``, a `small business 
        concern located in a historically underutilized business 
        zone','' after ```small business concern',''.

SEC. 4. OTHER TECHNICAL AND CONFORMING AMENDMENTS.

    (a) Title 10, United States Code.--Section 2323 of title 10, United 
States Code, is amended--
            (1) in subsection (a)(1)(A), by inserting before the 
        semicolon the following: ``, and qualified small business 
        concerns located in historically underutilized business zones 
        (as that term is defined in section 3(o) of the Small Business 
        Act)''; and
            (2) in subsection (f), by inserting ``or as a qualified 
        small business concern located in a historically underutilized 
        business zone (as that term is defined in section 3(o) of the 
        Small Business Act)'' after ``subsection (a))''.
    (b) Federal Home Loan Bank Act.--Section 21A(b)(13) of the Federal 
Home Loan Bank Act (12 U.S.C. 1441a(b)(13)) is amended--
            (1) by striking ``concerns and small'' and inserting 
        ``concerns, small''; and
            (2) by inserting ``, and qualified small business concerns 
        located in historically underutilized business zones (as that 
        term is defined in section 3(o) of the Small Business Act)'' 
        after ``disadvantaged individuals''.
    (c) Small Business Economic Policy Act of 1980.--Section 303(e) of 
the Small Business Economic Policy Act of 1980 (15 U.S.C. 631b(e)) is 
amended--
            (1) in paragraph (1), by striking ``and'' at the end;
            (2) in paragraph (2), by striking the period at the end and 
        inserting ``; and''; and
            (3) by adding at the end the following new paragraph:
            ``(3) qualified small business concerns located in 
        historically underutilized business zones (as that term is 
        defined in section 3(o) of the Small Business Act).''.
    (d) Small Business Investment Act of 1958.--Section 411(c)(3)(B) of 
the Small Business Investment Act of 1958 (15 U.S.C. 694b(c)(3)(B)) is 
amended by inserting before the semicolon the following: ``, or to a 
qualified small business concern located in a historically 
underutilized business zone, as that term is defined in section 3(o) of 
the Small Business Act''.
    (e) Title 31, United States Code.--
            (1) Contracts for collection services.--Section 3718(b) of 
        title 31, United States Code, is amended--
                    (A) in paragraph (1)(B), by inserting ``and law 
                firms that are qualified small business concerns 
                located in historically underutilized business zones 
                (as that term is defined in section 3(o) of the Small 
                Business Act)'' after ``disadvantaged individuals''; 
                and
                    (B) in paragraph (3)--
                            (i) in the first sentence, by inserting 
                        before the period ``and law firms that are 
                        qualified small business concerns located in 
                        historically underutilized business zones'';
                            (ii) in subparagraph (A), by striking 
                        ``and'' at the end;
                            (iii) in subparagraph (B), by striking the 
                        period at the end and inserting ``; and''; and
                            (iv) by adding at the end the following new 
                        subparagraph:
                    ``(C) the term `qualified small business concern 
                located in a historically underutilized business zone' 
                has the same meaning as in section 3(o) of the Small 
                Business Act.''.
            (2) Payments to local governments.--Section 6701(f) of 
        title 31, United States Code, is amended--
                    (A) in paragraph (1)--
                            (i) in subparagraph (A), by striking 
                        ``and'' at the end;
                            (ii) in subparagraph (B), by striking the 
                        period at the end and inserting ``; and''; and
                            (iii) by adding at the end the following 
                        new subparagraph:
                    ``(C) qualified small business concerns located in 
                historically underutilized business zones.''; and
                    (B) in paragraph (3)--
                            (i) in subparagraph (A), by striking 
                        ``and'' at the end;
                            (ii) in subparagraph (B), by striking the 
                        period at the end and inserting ``; and''; and
                            (iii) by adding at the end the following 
                        new subparagraph:
                    ``(C) the term `qualified small business concern 
                located in a historically underutilized business zone' 
                has the same meaning as in section 3(o) of the Small 
                Business Act.''.
            (3) Regulations.--Section 7505(c) of title 31, United 
        States Code, is amended by striking ``small business concerns 
        and'' and inserting ``small business concerns, qualified small 
        business concerns located in historically underutilized 
        business zones, and''.
    (f) Office of Federal Procurement Policy Act.--
            (1) Enumeration of included functions.--Section 6(d) of the 
        Office of Federal Procurement Policy Act (41 U.S.C. 405(d)) is 
        amended--
                    (A) in paragraph (5)(C), by inserting ``and of 
                qualified small business concerns located in 
                historically underutilized business zones'' after 
                ``other minorities'';
                    (B) in paragraph (10), by inserting ``qualified 
                small business concerns located in historically 
                underutilized business zones (as that term is defined 
                in section 3(o) of the Small Business Act),'' after 
                ``small businesses,''; and
                    (C) in paragraph (11), by inserting ``qualified 
                small business concerns located in historically 
                underutilized business zones (as that term is defined 
                in section 3(o) of the Small Business Act),'' after 
                ``small businesses,''.
            (2) Procurement data.--Section 19A of the Office of Federal 
        Procurement Policy Act (41 U.S.C. 417a) is amended--
                    (A) in subsection (a)--
                            (i) by inserting ``the number of qualified 
                        small business concerns located in historically 
                        underutilized business zones,'' after 
                        ``Procurement Policy''; and
                            (ii) by inserting a comma after ``women''; 
                        and
                    (B) in subsection (b), by adding at the end the 
                following: ``For purposes of this section, the term 
                `qualified small business concern located in a 
                historically underutilized business zone' has the same 
                meaning as in section 3(o) of the Small Business 
                Act.''.
    (g) Energy Policy Act of 1992.--Section 3021 of the Energy Policy 
Act of 1992 (42 U.S.C. 13556) is amended--
            (1) in subsection (a)--
                    (A) in paragraph (2), by striking ``or'';
                    (B) in paragraph (3), by striking the period and 
                inserting ``; or''; and
                    (C) by adding at the end the following new 
                paragraph:
            ``(4) qualified small business concerns located in 
        historically underutilized business zones.''; and
            (2) in subsection (b), by adding at the end the following 
        new paragraph:
            ``(3) The term `qualified small business concern located in 
        a historically underutilized business zone' has the same 
        meaning as in section 3(o) of the Small Business Act.''.
    (h) Title 49, United States Code.--
            (1) Project grant application approval conditioned on 
        assurances about airport operation.--Section 47107(e) of title 
        49, United States Code, is amended--
                    (A) in paragraph (1), by inserting before the 
                period ``or qualified small business concerns located 
                in historically underutilized business zones (as that 
                term is defined in section 3(o) of the Small Business 
                Act)'';
                    (B) in paragraph (4)(B), by inserting before the 
                period ``or as a qualified small business concern 
                located in a historically underutilized business zone 
                (as that term is defined in section 3(o) of the Small 
                Business Act)''; and
                    (C) in paragraph (6), by inserting ``or a qualified 
                small business concern located in a historically 
                underutilized business zone (as that term is defined in 
                section 3(o) of the Small Business Act)'' after 
                ``disadvantaged individual''.
            (2) Minority and disadvantaged business participation.--
        Section 47113 of title 49, United States Code, is amended--
                    (A) in subsection (a)--
                            (i) in paragraph (1), by striking the 
                        period at the end and inserting a semicolon;
                            (ii) in paragraph (2), by striking the 
                        period at the end and inserting ``; and''; and
                            (iii) by adding at the end the following 
                        new paragraph:
            ``(3) the term `qualified small business concern located in 
        a historically underutilized business zone' has the same 
        meaning as in section 3(o) of the Small Business Act.''; and
                    (B) in subsection (b), by inserting before the 
                period ``or qualified small business concerns located 
                in historically underutilized business zones''.
                                 <all>
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